Mercadolibre Inc. (MELI): Today's Featured Diversified Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Mercadolibre ( MELI) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day up 1.2%. By the end of trading, Mercadolibre fell $1.64 (-1.9%) to $85.21 on average volume. Throughout the day, 585,184 shares of Mercadolibre exchanged hands as compared to its average daily volume of 666,600 shares. The stock ranged in price between $84.98-$87.98 after having opened the day at $87.53 as compared to the previous trading day's close of $86.85. Other companies within the Diversified Services industry that declined today were: Innovaro ( INV), down 19.1%, Bioanalytical Systems ( BASI), down 14.4%, DLH Holdings ( DLHC), down 13.5%, and Daegis ( DAEG), down 10.9%.

MercadoLibre, Inc., together with its subsidiaries, hosts online commerce and payments platforms in Latin America. Its services are designed to provide its users with mechanisms to buy, sell, pay for, and collect on e-commerce transactions. Mercadolibre has a market cap of $3.79 billion and is part of the services sector. The company has a P/E ratio of 40.4, below the average diversified services industry P/E ratio of 40.9 and above the S&P 500 P/E ratio of 17.7. Shares are up 9.2% year to date as of the close of trading on Thursday. Currently there are five analysts that rate Mercadolibre a buy, one analyst rates it a sell, and two rate it a hold.

TheStreet Ratings rates Mercadolibre as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the positive front, Checkpoint Systems ( CKP), up 21.5%, Scientific Learning Corporation ( SCIL), up 14.9%, Education Management Corporation ( EDMC), up 13.2%, and American Learning ( ALRN), up 11.5%, were all gainers within the diversified services industry with Ulta Salon Cosmetics & Fragrances ( ULTA) being today's featured diversified services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).
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